Continental eliminating 600 call center jobs

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February 22, 2010 9:35:05 AM PST

DALLAS, TX --

Continental Airlines is cutting about 600 jobs in its reservations centers because customers increasingly prefer to book flights online. Continental told employees about the furloughs on Monday and said they would take effect April 11.

The airline said it will cut the jobs of 250 agents who are currently on leave plus another 350 still working.

The company said calls to reservations agents are falling 15 percent per year as customers instead buy tickets from Web sites. There is no charge for booking on continental.com, but customers must pay $20 to make a reservation by phone. Airlines use the call center fees to raise money and encourage passengers to book online, which is cheaper for the carrier as well as the passenger.

Continental also said it won't renew a contract to answer calls for Disney resorts, which will result in about 100 of the 600 job losses.

The Houston-based airline has about 2,600 U.S. reservations agents, with about 1,000 working from home and the rest at centers in Houston and Salt Lake City. Spokeswoman Julie King said most of the furloughs will be in the Houston area, including agents who work from home.

Last year, Continental cited the same downward trend in online bookings when it closed a call center in Tampa, Fla., and eliminated 500 jobs there.

The April furloughs will be based on seniority. The airline said it will offer early retirement packages including travel benefits to employees with at least 10 years of service, and will offer severance payments to others losing their jobs.

As of Dec. 31, Continental had 41,300 employees.

Airlines are looking for ways to boost revenue and cut costs as they deal with a slump in travel that started during the recession and has been slow to end.

Higher traffic and lower fuel prices helped Continental earn $85 million in the fourth quarter of last year -- a profit that surprised analysts. Still, the airline lost $868 million in 2008 and 2009 combined.

Continental has tried to return to profitability by imposing and then raising fees for handling checked luggage and other services. On the cost side, new CEO Jeff Smisek said last month he would not take his $730,000 salary and bonuses until the company makes a full-year profit.